The controversy comes as many Republicans have called for the debt ceiling to be used to extract concessions from the White House, and reflects growing fears in Democratic and economic circles that the GOP may be willing to jeopardize the country’s credit and financial stability in its pursuit of it. Political goals.
The United States did not fail to pay its debts. But such a move would immediately send the economy into a tailspin, send interest rates soaring and reverberate around the world.
“It’s just crazy over the top that we’re going down this path, but I think the odds are increasing as we will,” Mark Zandi, chief economist at Moody’s Analytics, said of the breach of the debt ceiling. “If we are not in a stagnation at that time, we will be.”
The White House is unlikely to get its way moving forward until after the midterm elections, and it can still allow this issue to play out until 2023, when a new Congress will be sworn in. In public, officials have refused to discuss any post-election priorities — insisting that Democrats still have a chance to control their majority in the House and Senate.
Biden, who was vice president at the center of the Obama-era debt ceiling brinkmanship, has ruled out scrapping the debt limit, calling it an “irresponsible” idea. But he seized on Republican rhetoric about him in the final days of the midterm campaign, warning that the Republican Party would hurt the economy if it gave control of Congress.
“Nothing, nothing, nothing is going to create more chaos and do more damage to the American economy than playing with whether we pay our national bills,” Biden said during an appearance Tuesday in Florida.
However, within the administration and on Capitol Hill, there is little doubt that Republicans are ready to take over the House at least — and that Democrats will need to move quickly to take full advantage of their final weeks in power.
Democratic leaders are already juggling several competing priorities for the lame-duck session, including efforts to pass a major defense bill, push through pending legislation to allow power and votes on proposals that protect same-sex marriage and cement the electoral process. Congress also needs to reach a government funding agreement before the December 16 deadline.
However, as those preparations have intensified in recent days, many Democrats have reached what a person familiar with the discussions called “growing agreement” that the debt ceiling should be resolved, if at all possible, before the end of the year.
“You are talking about tearing the country’s internal interior.” “It should take an extraordinary effort from rational thinking to do everything possible to avoid this when passing.”
However, the paths forward are limited. The Biden administration is considering whether to negotiate a deal with Senate Republicans to raise the cap in the weeks after the midterm elections, hoping Minority Leader Mitch McConnell is open to avoiding potential economic damage from facing the debt limit, Early Planning said.
The alternative would be for Democrats to use the budget reconciliation process to raise the debt ceiling by just 50 votes in the Senate — an approach that would bypass Republicans entirely, but would require a number of procedural steps that could eat up valuable time that lawmakers were hoping to allocate. To other agenda items at the last minute.
Some Democrats put forward more aggressive proposals, including giving management unilateral authority to raise the roof of the debt, or raise it to an unimaginable amount in order to eliminate it effectively, or pay Biden to reconsider the complete cancellation of the maximum. In a letter sent earlier this week, 31 House Democrats urged Hill’s leadership to “permanently end the threat that the federal debt ceiling poses to our economy and our place in the world.”
But some of Biden’s advisers see the repeal option as politically unwise and much more difficult to reach consensus even among Democrats.
One of Biden’s advisers said: “It will be very difficult to make it clear to people that we will borrow as much as we want to borrow without limits.” “Offensive ads write themselves.”
Officials still hope that McConnell, who was the largest Republican member of the Senate during the 2011 debt ceiling crisis, would be keen to avoid repeating that harmful episode after more than a decade. But his willingness to cooperate can stop at least partially on the control of Democrats on the Senate. The proposal looked increasingly confirmed in the extended range of the campaign.
There is less confidence that the leader of the Republican Party in the House of Representatives Kevin McCarthy will be open to discussions, especially in the face of invitations from his conservative wing to use the Eddin as a means of pressure to negotiate the reduction of spending. Former President Donald Trump McConnell has been repeatedly attacked for not using the debt ceiling as a financial leverAnd the Thursday said that the Republicans should “isolate” Maconel if it mediates a deal of religion with the Democrats.
“If I were a Democrat, I would have been trying to move an extension during the lame duck period,” said Duji Hi, a Republican strategic expert who was one of the Republican Party leadership employees during the Obama battles on the roof of the debt. He added that the conservative base of the party is likely to rejoice to fight the boundaries of debts, even if there is no clear exit strategy. “If they do not do that, they are in a position they have to negotiate with Republicans who do not really want to negotiate.”
Biden’s advisers expressed their confidence that the Republicans will ultimately blame any repercussions of playing with the roof of the debt, stressing that it is up to McAthth to be up for discussion.
But Biden himself has not yet reached this position. While the White House stated that it believes that any bill to raise the debt limit should be clean and excluded the reforms of the benefits as part of any deal to raise the ceiling, it did not draw similar lines about estimated spending discounts.
The assumption, in part, is that the ghost of an economic catastrophe will carry some heavy political burden for them.
Zandy said: “Every time we walk in this way, we are closer and more than the edge of the abyss.” “If they make a little mistake, the consequences will be very severe.”
Ben White and Sarah Ferris contributed to this report.